Fox pact challenges China’s vid pirates

Studio, Zoke launch Chinese releasing operation

Twentieth Century Fox Home Entertainment is preparing to challenge China’s video pirates head on.

Studio is launching a new Chinese releasing operation in the Middle Kingdom through an exclusive arrangement with the country’s largest legal video distributor, Zoke Culture Group.

The distribution agreement between Fox and Zoke is an important symbol of the stake both China and the U.S. have in seeing intellectual property rights vigorously enforced in China, according to U.S. commerce secretary Carlos Gutierrez, who was present at the signing ceremony.

Operations will kick off with “Garfield: A Tale of Two Kitties,” “Ice Age: The Meltdown” and “X-Men: The Last Stand.”

Ongoing slate will include a mix of library titles; the handful of movies that have been recently released through China’s revenue-sharing quota system; and other recent pics.

Initial roster will be an annual 20-40 titles, building to hundreds once operation achieves cruising speed.

TCFHE said it also will enter into local production arrangements to supplement the imported lineup.

“All the titles we release will have to go through the censorship process in the usual way,” said Mike Dunn, TCFHE worldwide prexy. “We have been building that relationship for years, but the big difference between this market and the theatrical releases is that there is no annual limit.”

To counter China’s massive piracy problem, company said it is committed to shortening release windows and lowering the cost of legitimate product.

“Garfield 2″ has brought in a boffo $7.3 million (RMB57.5 million) since it was released Aug 11.

Consumer price for movies will be $1.50-$1.87 in the popular VCD format and $2.25-$3.75 for DVDs. That is still higher than much pirate product, which often retails for $1 or less, but venture is counting on quality of replication and wide availability as significant weapons in the fight against knockoffs.

“With Zoke we are accessing a network that allows us to compete effectively. Lower-price products will always exist, like own-brand goods in a supermarket,” Dunn said.

Zoke is a Guangdong-based conglom with 20,000 retail outlets and interests in entertainment distribution, talent management and electronic consumer goods production. In the music sector it reps Time Warner Music and Universal Music.

Dunn said movies will get home entertainment release in China “as quickly as we can,” typically three months after theatrical release. Windows plans are complicated by releases of movies in other territories outside China and uncertainty over which movies will be selected by China Film Group and the Film Bureau for theatrical exhibition within China. Dunn promised the windows policy will be both “experimental” and “aggressive.”

Moves to bolster movie production in China will be managed through Fortune Star, an offshoot of News Corp.’s Star TV operation based in Hong Kong.

“This is not strictly a theatrical initiative. We expect movies to enjoy a theatrical release in China (before going on to video), but elsewhere they are intended for home entertainment,” Dunn said.

Warner Bros is currently the only other studio with its own home entertainment division in China, having established joint venture Warner CAV in February 2005. Under a deal announced in September of that year, unit also handles U’s titles in China.